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My Rant On Privacy

With privacy be careful what you wish for. I for one am tired of the same privacy argument from the same folks who are the most public of us. Privacy is the new boogie man akin to war, corporations and Sarah Palin. The Europeans, more specifically the Germans, are pretty ridiculous about it. Google just had to pay a pound of flesh to the FTC over Google Buzz privacy issues at launch that affect 2 people. Even Pandora, I service I love because it’s free, is facing suit over user information it may have transmitted to advertisers.

NEWS FLASH GEEKNERATI: normal people could care less about privacy because there is no real utility in being private and paranoid. I fail to understand this. Of all the things to worry fork about, online privacy should be the least of your worries. Let’s stop using the red herring of privacy when things like Color hit the scene. Color is an innovative attempt at connecting people serendipitously, don’t kill it with your neurosis’s about privacy.

People in India don’t care. In fact India is on a massive effort to give everyone of their 1.2 billion citizens the “mark of the beast.”  A massive data collection effort that will be a boon to effective governing of a billion people,  and if their smart to future advertisers. Sinister, isn’t it. Even most Chinese don’t care much about privacy and they live in the most technologically oppressive and censored regimes on earth.

The point is most of these “privacy” violation are done for one reason, to sell you shit.  The future of the web as a continuing force for good depends on and will survive going forward on ads that are targeted socially and geo-spatially. Wonder why Pandora seems to (but not always) target its ads between songs just for you in your area? Why can Google offer the Android operating system for free? Why is Facebook the largest free repository of social interaction on the globe? Ads.

We have to pay one way or the other. We can’t have our cake and eat it too. We pay with our private information and what we receive back is utility.  If we allow a loud minority to persuade governments of an absolute right to privacy, we loose what the web is, a relatively free realm of “open” exchange. The point is the zealots have truly subjective views on privacy. One size doesn’t fit all. Truth be told I think it there might be a better way of looking at privacy. The brooking institute has an excellent name for it: databuse. This is an attempt to more objectively codify “privacy” and shape it for the modern era. Long read, but a great thought piece.

I also see a generational shift when it comes to this. I have teenage nieces and nephews whom are quite the exhibitionist when it comes to what they share. I have tried my best to train them in the art of discretion, but my notions of sharing and theirs are miles a part (or almost a generation a part).  They simply don’t see it they way we do. I only point this out because yes we need to have a discussion on this, but it should be more in educating future users of connected services on how to use their private information as a currency.  We must encourage the world to share and add to the mosaic of human knowledge in a smart and responsible manner, not to scare the shit out of them.

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Start-ups in the Land of Enchantment

It’s been a while since I’ve written anything of consequence, but this past week has inspired me to spew more of my thoughts and rants on virtual paper. I have began the process of networking among the entrepreneurs here in the land of enchantment.

This week I attend a conference on starting a high-tech business in New Mexico with a local tech incubator, Technology Ventures Corporation (TVC). They run a series of seminars called Center for Commercialization & Entrepreneurial Training (CCET). Started in 1993, TVC was an effort to commercialize technology developed in our national labs (Sandia and Los Alamos). Lockheed Martin runs Sandia National Laboratories here in Albuquerque and in Livermore, CA. They went fishing for new business opportunies within the Lab hence TVC was born. TVC provides services to start-ups wishing to commercialize their technologies into products. They will analyze business plans, mentor and introduce you to venture capitalist if your product or idea proves worthy of an introduction.

This weeks seminar was about writing a business plan. One of the Project Directors Suzanne Roberts, gave a great presentation. I’ve spoken with her one-on-one before and she seems extremely knowledgeable.

One of the speakers that got me most excited was John Chavez, President of the New Mexico Angels investment group. His presentation on the Venture Capital industry from an angels perspective was eye-opening. In his view the conventional VC model is broken. It is much too focus on 30x to 10x returns on its portfolio. So VC’s are shifting their investing into later stage funding rounds of a venture. Most of their portfolios are filled with dogs that the fund is force to continue to finance. That leaves little money for new ventures. In 2007, 258,200 angels pumped $26 billion into 57,120 U.S. companies. Now this figure is pre-recession however, it does show where lots of money resides for early stage ventures.

And what are regional Angels and VCs looking to invest in? Mr. Chavez’s group is looking for companies doing software, database storage and retrieval, as well as early stage medical device and drug makers. You would be surprised how much of this stuff happens out here in the desert. The labs here specialize in the material sciences and supercomputing to support the nuclear weapons stockpile security mission. That produces lots of data and new methods to store, retrieve and process it.

There is also lots of “Green” tech that starts in our labs, however these are usually too capital intensive so they often require “Big” VC funding combined with government grant money to scale. Angels, at least out here, don’t go there. New Mexico Angels typically invest during a seed round at no more than $500,000. The New Mexico Angels are having a Angel Bootcamp on April 19th that I’ ll be attending. There I hope to do some good old fashion networking to see if I can highlight some innovative New Mexico start-ups.

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Killing Capital Markets and Competitiveness for Start Ups

Things like the AngelList are nothing more than markets finding ways around arcane and reactionary laws like Sarbanes-Oxely and Dodd-Frank. You can group Second Market and SharePost into that same category. You wonder why start-ups and small business turn to the modern day equivalent of loans sharks, angel investors. Thank your friendly SEC for forcing compliance cost through the roof. Thank the SEC for blocking access to these very secondary markets from the little guy for his own good. Thank the SEC for pushing start ups, large and small, into the hands of VC’s and angel investors that usually don’t have the sustainability of the enterprise in mind when they invest.

That rant was not the typical Anti-regulatory rant your use to from me. The SEC (and the other alphabet soup of securities regulating agencies) do serve some purpose. I have yet to see what in light of the Enron and Worldcom debacles of the 90’s and the Madoff /Standford schemes of the past couple of years. Sarbanes-Oxely and Dodd-Frank are only going to penelize those who comply while the real crooks create the next financial crisis. Remember, Sarbanes-Oxely was a result of Enron and Worldcom scandals. A whole lot of good that did us when Wall Street sold us down the river 8 year later.

So all this hoopla surrounding AngelList’s, Second Market, SharePost , Twitter and Facebook valuation is really missing the point. The issue here is how we got to the point where these secondary markets became necessary to the start up ecosystem. Ever wonder why Twitter and Facebook haven’t IPO’ed? Could it have been the onerous mandates of Sarbanes-Oxely? Or the overwhelming amount of meddling a founder would have to contend with being publicly traded? There are less protections for a public company from the masses then are bestowed on the public from the SEC on high. Hell, I wouldn’t go public in this country if I had a choice. This sucks for start ups who could easily go to the public markets to raise funds. Instead they are forced to take there chances with VC, Angels and private equity vultures. Wonder why we are killing our capital markets and along with it our competitiveness? Silly ass securities laws.